US businesses have a greater than 1 in 10 chance of having employment charges filed against them

Specialty insurer Hiscox recently released the findings from its state-by-state study of employment litigation trends. The analysis found that US businesses with a minimum of ten employees have a 12.5 percent chance of having an employment charge filed against them.

Five locations were highlighted has having significantly higher rates of employment litigation than the nationwide average. Alabama, California, the District of Columbia, Illinois and Mississippi ranked highest among states with the most employment litigation. This ranged from Georgia, with an 18% increase from the average, to Washington D.C. which was calculated to have a risk 32% greater than the national average.

On the other end of the spectrum, the analysis identified Kentucky, Massachusetts, Michigan, Washington and West Virginia as states with the lowest rates of employment litigation charges filed. Bert Spunberg, Hiscox senior vice president pointed to state laws to understand the wide range of state percentages.

Hiscox described the study as based on the number of charges divided by the number of businesses with more than 10 employees. The analysis “analyzed credibility-weighted frequency relativities and compared each state to the countrywide average”.

Mark Ogden, Littler Mendelson managing partner, commented on the importance of the analysis of employment litigation trends by state, stating in an interview with Insurance Journal that “unlike their federal counterparts, where compensatory and punitive damages combined are capped at $300,000.00, most state employment statutes impose no damages ceilings.”